We are at the forefront of major economic and social change, which has the power not only to disrupt a company’s business model, but also that of an entire industry.
The retail and travel industries have had to respond to the way the internet has changed how consumers buy and make purchasing decisions. The rise of 3D printing makes it look like manufacturing will face similar challenges and it’s clear that sites like Napster altered the way we listen to and buy music. It literally changed the business model and operating assumptions in the music industry.
Yet Napster is just one example of the growing sharing or collaborative consumption economy, which is also making its presence felt in the tourism and visitor economy. The rise of bike and car sharing is reducing the dependence on public transport and, similarly, the growth of accommodation sharing sites such as Airbnb and Couchsurfing are rivalling traditional accommodation providers.
According to Jeremy Rifkin in his thought-provoking book, ‘Zero Marginal Cost Society’, this year Airbnb will surpass Hilton and InterContinental by filling more rooms globally. To date, 3m guests have booked 10 million nights in 33,000 cities across 192 countries using this site.
If you’re thinking that this phenomena is limited to a dedicated group of ‘liberal, communitarians’, think again! Rifkin points out that this trend is part of a move away from people wanting to own a product to having the opportunity to just access it instead. He believes that young people in particular, who have grown up with free access to the likes of Google and Facebook, have a very different perspective to their parents and grandparents when it comes to the need to purchase things.
So what does it mean for operators? Well, first of all, it doesn’t look like this trend is going away and so it should not be ignored. Sites such as ParkatmyHouse for people renting and buying garage or drive space or Thredup, which provides a platform for recycling clothes, highlight the range of opportunities for consumers.
At the heart of this move is the power of peer-to-peer reviews and the influence this has on buying decisions, rather than the traditional weapon of slick marketing.
Some operators have woken up to the potential threat this new model poses, making the case that the likes of Airbnb are not subject to the same legislation that they have to follow. In response, Airbnb has argued that it is opening up the market rather than taking away existing business.
As the sharing or collaborative consumption economy grows, these arguments will no doubt become more common. It is likely to become more commonplace and has the power that other trends have shown before to disrupt the business models we currently take for granted.
